Workout & Consulting Services
New Paradigm Development Partners, LLC (“NPDP”) provides innovative financial recovery services to financial institutions, as well as commercial, residential, and mixed-use developers. Through negotiation and consensus building, NPDP has compromised or restructured over $700 million in commercial debt. Selected Hospitality experience includes a major capitalization between AEW and a private hotel group, and a reorganization of $100 million of real estate debt and related disposition of $40 million of underperforming assets for United Inns, Inc. NPDP also represented United Inns, in conjunction with Smith Barney, Inc, in the sale of the company to Bristol Hotel Group in November 1994 for $25 a share.
New Paradigm Development Partners, LLC. (“NPDP”) believes that the process of seeking Resolution should be based on what we refer to as the three R’s:
1. Reorganization :Underwriting and Data Assimilation of the Portfolio
2. Restructuring: Development of the Borrower’s Operations
3. Recapitalization of the Borrower’s Indebtedness
Task 1: Reorganization
Financial institutions, due to an unprecedented growth of Special Assets, often only see a borrower through the narrow prism of the loan(s) they have outstanding to them. In order to approach a lender effectively about a workout plan it is imperative that the borrower communicate the complete picture of the challenges inherent from the developer’s entire situation. It would follow then that it is essential that management must first have at its command all the details and documents associated with the individual assets. Therefore, as Task 1 we provide a service wherein all the essential portfolio related information is compiled into one integrated, seamless electronic database.
Task 2: Restructuring: The Workout / Strategic Disposition Plan (“WSDP”)
The major benefit derived from completing Task 1 is having the capability to effectively complete Task 2. The database provides an endless array of permutations for how the total portfolio may be sliced and diced (i.e. location, property classification, loan classification, loan size etc.). The analysis of this data juxtaposed against market conditions will also allow our team, in conjunction with management, to develop and assign value to the individual assets. Inherent in the valuation exercise will be the development of a Workout and Strategic Disposition Plan with the developer’s creditors.
Task 3: Recapitalization: Implementation of the “SDP”
As a means of implementing this plan our group will also:
1. Commence with Immediate Capital Transactions – As the initial step of the NPDP strategic plan, we would arrange for the immediate disposition or refinance of certain assets. The guiding objective would be to maximize the preservation of portfolio assets and the generation of new capital to be used in an overall restructuring program. In our execution of this portion of the plan we have the ability to employ unconventional techniques such as debtor in possession (D.I.P.) financing, the purchase of the developer’s debt by an affiliated third party and / or participating second mortgages and mezzanine facilities. Moreover, fees generated from these transactions can be used by NPDP to offset the consulting fees related to Tasks One and Two.
2. Negotiate and Administrate Workout, Maintenance and Forbearance Agreements – NPDP will procure workout, maintenance and forbearance agreements with lenders to provide a bridge for the asset to a time or state where recovery can be maximized. NPDP can also, where applicable, provide revised development and construction planning and process management. NPDP will also manage the eventual disposition of the asset for the parties.
3. Organization of Liquidating Trusts – From a strategy standpoint, certain assets must be viewed as long term positions. Either market conditions or the diminished capacity of the borrower make it impossible to realize any value in the short run. A liquidating trust would involve transferring the assets classified as long term to a joint venture with a goal of intermediate preservation and eventual liquidation. The entity may be made up of one or more financial institutions, unsecured creditors and often the borrower or an affiliate. Priority positions are established in a fashion similar to what a chapter 11 plan would yield. The trust would be managed under the guidelines of a settlement agreement by NPDP acting in much the same capacity as a receiver.
